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Art & Commerce: High Noon

It’s time to determine what drives brand loyalty online The clock is striking 12 for e-commerce. Like the classic Western, when the dust settles few e-tailers will be standing tall. Only companies that understand changing marketplace values will prosper. Like traditional brand managers, e-brand managers must continually probe the dimensions of customer and brand values to chart shifts, map desires and act quickly. Traditional skills, insights and techniques do not transfer directly to the Internet. To build a brand online, a company must have an accurate read on consumers’ changing values in relation to the Internet. One must understand that consumers have different expectations of the Web than of offline retailers or catalogs. Each mode of shopping calls into play different drivers, which determines expectations, behavior and sales. What drives sales, loyalty and profits online? Let’s compare Amazon.com and Barnesandnoble.com. Our study–which contacted a statistically significant number of consumers–yielded four key drivers of sales and customer loyalty for the category ideal and the individual brands: – right product/has what I want – ease of operation/hassle-free Web site – good price-value relationship – system/payment security. The only driver where B&N even approaches Amazon is good price-value relationship. Both companies offer more or less equivalent discounts, and since price is easy to compare, this is no surprise. The surprise is how consumers rated the other three drivers. In their advertising, both booksellers tout a wealth of titles. But Amazon is head and shoulders above B&N on the right-product driver. Consumers believe they are far more likely to find the book they seek at Amazon.com. This is particularly bad news for Barnesandnoble.com, since this driver turns out to be the most important single determinant of brand loyalty in the category Does the Amazon.com Web site look better? Is it easier to navigate? Does it load faster? People seem to think so, which accounts for Amazon’s strength on the ease-of-operation driver. People also view Amazon as tops in the system/payment security category, too. While B&N (the bookstore) clearly knows how to cater to traditionalists who enjoy the physical process of book shopping, Amazon.com does a better job attracting and satisfying the online book buyer. What can a new entrant to e-tail, or a successful, traditional business, do? To begin, take a measurement of critical brand drivers: brand equity, brand-to-customer values and brand loyalty. Learn how your brand measures up to customers’ ideal brand, and use that knowledge to drive your e-brand management program. Research tools can help by highlighting differences between what people think and what they say they think, and provide accurate insights into relationships between customer and brand. To be successful, e-brand managers must continually probe the dimensions of customer and brand values and plan for every possibility. K